A damning audit report on Cheshire East Council’s arrangements for managing S106 agreements has revealed millions of pounds hasn’t been allocated to agreed schemes, writes Belinda Ryan.
A summary of the report to the audit and governance committee stated eight contributions received between 2018/19 and 2021/22 totalling £5.8 million were identified as unallocated.
This was one of many worrying issues unearthed. It has has resulted in an overall assurance rating for this review of “no assurance” – the lowest rating.
The report states: “This reflects that there are currently significant areas of risk which are not being managed effectively in relation to the effective and efficient use of S106 agreements and contributions.
“This audit report findings relate to operational processes, governance, and a lack of strategic oversight in place for senior officers and service committees.”
S106 agreements are contracts between the council and developers to secure financial or other contributions to mitigate the impact of development.
Agreements may include payments in place of direct provision, such as financial contribution to education to fund additional school places when building of new homes in an area.
The money could also be allocated for highways schemes to mitigate the impact of a development.
One S106 agreement in Nantwich is money set aside by Kingsbourne housing developers to fund the A51 Reaseheath bypass, which remains unopened.
S106 contributions have to be used for the scheme they were allocated for and they have to be used within a specific timeframe.
If the money isn’t used within an agreed period, the developer has the right to request it back.
It is not known if Cheshire East has had to return funding – or how much – because the bulk of the discussion about the S106 review took place behind closed doors after members of the public were excluded on the grounds the debate may involve the likely disclosure of exempt information.
The Local Democracy Reporting Service was unable to attend the audit committee meeting to report what was said in the public session because Cheshire East scheduled a meeting of the environment and communities committee in Sandbach at the same time.
The main internal audit report has remained private but the summary which was publicly reported to the audit and governance committee is damning.
The headlines from the review include:
– Lack of clarity about roles and responsibilities across the 106 process
– Insufficient oversight by senior management and members of S106 activity and delivery
– Reference to 93 legacy agreements inherited from predecessor authorities. Of these, eight were time limited with only one recorded as being fully committed. The report says the seven remaining agreements had not been committed within the required deadlines and the developers may request repayment of any uncommitted balance. It adds should any monies be committed after the deadline, there is a risk that these amounts may need to be repaid at some point in the future.
The review also highlighted an internal audit had previously reviewed S106 agreements in 2017/18 “and a significant number of findings from that audit are repeated, in full or in part in the current review”.
It means the findings from the review six years ago were not acted upon.
A number of actions which need to be taken were highlighted and the council is also to appoint a S106 officer.
A further update on the recommended actions will be reported back to the audit and governance committee at a future meeting.
Surely this needs investigating by the police. It stinks of corruption and possibly criminal acts may have taken place. Internal investigations behind closed doors are not the answer.
I totally agree
You can’t beat a quality council, shame this lot are definitely not quality, it’s like being run by Billy Smarts circus, but not nearly as funny.
Shame there isn’t a bin available for rubbish councillors, I might even pay the 56 pounds they want to charge to get rid of the garden waste .
Who will follow the CE through the door, she is on her way to Bradford. This is surely damming incompetence by Senior Officers/Senior Councillors.
Before retiring I was responsible for providing many hundreds of affordable rented homes via Sect 106 agreements, also a Health Centre with flats over the top, not the disguised £300k+ so called affordable ones on new developments.
Forward thinking Councils used this to better their localities. Is CEC fit for purpose? I think not – another damming report!
I thought it was the developers holding up the opening of the A51 by pass because 750 houses had not been sold yet. It’s a big white elephant anyway, benefiting a few houses in Reaseheath only (not even in Nantwich), the money could have been much better spent somewhere else in town.